Updated Scenarios for Trump's Trade and Fiscal Policies

This technical report presents updated scenarios regarding the trade and fiscal policies of the Trump administration as of March 2025. It outlines the increased tariffs anticipated in the 'Trump 2.0' base case and the 'Trump unleashed' downside scenario, reflecting a significant rise in the US average tariff rate. The report details the implications of executive actions on trade, including reciprocal tariffs and sector-specific tariffs, particularly concerning China, Canada, and Mexico. It also discusses the limited progress on fiscal policy and immigration, highlighting the divisions within Congress that affect the administration's goals. The report notes the potential for a 10% reduction in the civilian federal workforce and the impact of these policies on business uncertainty and economic fundamentals. Additionally, it examines the political hurdles facing Trump's fiscal policy ambitions and the expected trends in immigration policy, emphasizing the challenges in achieving the proposed increases in deportations and the overall impact on net migration.